Imagine Central London has been invaded by an army of robots which are now bunkered down somewhere on Oxford Street.

Your mission, and that of your friends, is to find the shop on the capital's famous two-mile retail strip that harbours the enemy's lair.

All you have at your disposal is your ingenuity, and one of those next-generation mobile phones fitted with satellite-navigation and loaded with a gaming database that maps a fantasy universe on to real-world locations.

As you walk into specific shops, the gaming software is triggered to display audio and video items on the handsets - clues that take you to the next location.

The clock is counting down and you will have to split up to cover the ground, using the mobiles to stay in contact and exchange snippets of information.

Step forward

Fantasy but not fanciful. Gaming applications like this could become a major growth area in the next few years as entertainment companies look to exploit the new possibilities offered by satellite navigation.

Europe is in the process of building an entirely new space-borne precise timing and location network that should substantially improve the service already provided by the American-run GPS (Global Positioning System).

The Galileo network's extra satellites will make getting a fix on handsets easier and quicker, especially in urban areas; and its enhanced signal (complementary to GPS's) should also improve accuracies.

Combine this with the improved power and functionality of the latest mobile phones and you can see how consumer sat-nav applications could really jump to another level - moving beyond simple in-car route guidance.

"The mobile phone companies are interested in selling bandwidth on their phones - they want to be a data pipe," says Tim Just from Thales UK, the GPS receiver manufacturer.

"They have invested in the location technology and now they're looking to the wider market, to the entrepreneurs, to come up with the services that are location related. It could be gaming - why not?"

'Virtual companion'

The industrial, professional and academic sectors have seized on GPS and turned it into an invaluable, everyday tool; the network's data is used in a myriad of applications from timing financial transactions to measuring the speed of glaciers.

It's a massive market and it's wide open for new products

Chris Finch, EveryWhichWay

But there is a feeling that the consumer market has been underexploited so far, and is prime territory now for anyone with a bright idea and some business nous.

The evidence can be seen in the huge sales last year of in-car sat-nav units - up in the UK by more than 1,300% with 670,000 systems sold.

Inevitably, these users will want more than just smart directions that avoid the jams.

Chris Finch certainly believes so. His company, EveryWhichWay, is developing software that would turn a car's sat-nav system into a "virtual travelling companion".

As the vehicle passed a castle on a long, dull motorway drive, the system's voice would pop up with some interesting historical information about the monument - past battles, the kings that stayed there and perhaps some ghost stories.

You can see, too, how a tourist with their sat-nav mobile might appreciate this type of "culture guidance" as they moved through the old quarter of a foreign city.

"We were aware that while the technology for identifying where you are is actually quite sophisticated, there really aren't very many good and effective consumer allocations out there," Finch told the BBC News website.

"It's a massive market and it's wide open for new products."

Proper delivery

EveryWhichWay, an Aberystwyth company, was a UK runner-up in last year's Galileo Masters, a European-wide competition that hopes to spur new enterprises across the EU bloc into thinking up new sat-nav possibilities.

The British regional winner, Richard White, is pushing forward with his idea, too - a secure, internet-based system for managing the delivery of important or high-value consignments.

Satellite-navigation is not essential to its working but knowing the precise location of a load during transit will give customers an extra level of assurance, especially if legal responsibilities are only fulfilled if the consignment reaches its intended destination.

This is the case, for example, with the disposal of waste which attracts heavy fines for dumping at unauthorised sites.

Trackerback, as the system is known, has already received strong interest from US and Middle East concerns.

"The support I've had through winning the competition has helped me focus my idea. It's also given it a tremendous lift - I can't be viewed now as a one-man band in a shed with a dog," White joked.

"People take a lot more interest in Trackerback knowing it was the UK winner of Galileo Masters."

Innovation 'trigger'

The first test satellite for Galileo was launched in December. The full system should be up and running by the end of 2010, or soon after.

It will differ from GPS, not only in the fact that it will be a civilian-run service but also in that it will offer performance guarantees.

Users can get "integrity messages", which will tell them if there are errors in the signal. This should give Galileo the added reliability to be employed in critical, safety-of-life situations - guiding buses, landing planes, and keeping vehicles on motorways the required distance apart.

The compatibility (same frequencies) and interoperability (used together or separately) with GPS and the Russian Glonass system should see sat-nav receivers get a fix in even the deepest "urban canyons".

Taken together, it should be the magnet that draws the innovators.

"It is a combination of things coming together which will be the trigger to make entrepreneurs go out and do things we haven't done before," said Richard Peckham from EADS-Astrium, one of the companies involved in constructing Galileo's first satellites.

"For some it will be the extra confidence in the signal; for some it will be accuracy; and for the mobile phone-type applications it's really going to be the extra satellites - these will give you the availability that means your customers can rely on your service."

Ten regions in nine countries across Europe are taking entries for the 2006 Galileo Masters competition.

The UK challenge is managed by the Hertfordshire Business Incubation Centre (HBic). The competition's website will close to bids on 30 June.